RBA holds rates at 0.75% in a game of wait and see
Despite not cutting the official cash rate today, the RBA is strongly indicating a sustained period of low, and lower interest rates. At today’s meeting, Governor Philip Lowe announced the cash rate would remain at 0.75% but hinted at further easing in the future.
This is great news for home-owners and those looking to build their property portfolio as the cost of borrowing money has never been lower.
Many economists had predicted a rate cut today but recent economic results now suggest that April will see the next rate change.
One of the reasons for maintaining the current rate is the upswing in the housing markets, particularly in Melbourne. House prices here are up 8.2% annually and auction clearance rates remain good. Many owner-occupiers are taking advantage of the low interest rate to buy into the market.
The unemployment rate also dropped to 5.1% in another sign that the RBA’s previous interest rate cuts are working. These two factors give the Reserve Bank enough reason to wait-and-see how the economy performs over the few weeks. They have bought themselves some time before needing to cut rates again. And cut they will. We can expect to see low interest rates for the next year or so at least.
In today’s announcement, Governor Philip Lowe said the RBA were prepared to cut rates again if necessary. He mentioned in particular the potential impact on the global and domestic economy of the current US and China trade disputes. He also singled out the impact on the Chinese economy of the Coronavirus.
If you’re looking to take advantage of the current market conditions in Melbourne, talk to us about securing the best possible mortgage for you. Or call us if you want to check that your current mortgage is the best one for you.
Marc has been a professional lender for 28 years. After beginning his career in 1990 with a UK Building Society, he moved to Australia where he held several different retail banking roles. In 1999 it became clear to him that a mortgage broker would eventually become an obvious choice for someone looking for a home loan so he took the plunge and became an independent broker. He hasn’t looked back since!